CAB reports record sales
Oct. 18, 2012
WOOSTER, Ohio – Certified Angus Beef LLC (CAB) reported record sales of its signature brand for a sixth consecutive fiscal year that ended Sept. 30, despite US cattle and beef supplies being curtailed by economics and an ongoing drought. The brand’s 16,000 businesses partners worldwide generated an estimated $4 billion in consumer annual sales. Six years ago, these sales were estimated at $2.3 billion, a CAB spokesman told MEATPOULTRY.com.
Sales totaled 811 million lbs., surpassing last year’s record by 4 million lbs. and up 49 percent from six years earlier. CAB brand sales advanced from representing 5.6 percent to now more than 9.6 percent of all federally inspected cattle harvest.
CAB partners around the world made these accomplishments possible by capitalizing on the consistent dining experience the premium brand brought to consumers as prices for all beef continued higher, according to CAB. “It is only because of our partners’ dedication and commitment that we see gains,” said John Stika, CAB president. “Their hard work and leadership of the quality beef movement is what makes this brand relevant and successful.”
Growth, which was led by the foodservice and international divisions, varied between company sectors. Partners with the greatest success stepped up their commitment to the CAB brand using innovation, creativity and targeted promotions. Sales, which hit all-time highs in March, August and June, saw the most growth in clod sales from the chuck and in all grinds.
Foodservice sales, which made up more than 32 percent of total CAB business volume, grew more than any other area at 4 percent and set an annual record of 260 million lbs. Sales came mainly from end meats and grinds, which increased 6 million and 10 million lbs., respectively.
Thanks to consumers more closely monitoring expenses and tracking favorable dining experiences, direct sales to licensed restaurants increased 16 percent. Those restaurants, which recognized the continuing demand for high-quality beef, initiated steps to add brand messages on restaurant menus, magnifying their ability to communicate the value advantage to consumers.
Retail sales declined 2 percent, but the division finished strong with summer grilling months sales among the highest ever. Those partners experiencing the most sales tended to have the most brand features in their advertising circulars. Among the top 25 CAB licensed retailers, those with increased sales also had an average of 10 percent more front-page ads vs. 2011, and placed 47 percent more brand ads in total.
A return to record-setting international sales is exceptional since they finally moved past the global US beef sales setback of 10 years ago. Record sales months in February and March demonstrated market-access issues and product-flow disruptions would not keep international sales from rising 4 percent, totaling 94 million lbs. in 55 countries. Canada and Mexico remain the strongest foreign markets, and the brand was introduced in Colombia, Peru and Chile.
A record 21.5 million lbs. from the value-added products division surpassed its 2011 record by 16 percent. The introduction of such convenient, high-quality items as retail-packaged marinated cuts and fully-cooked refrigerated and frozen entrées spearheaded this success.
Since drought conditions throughout North America factored into an overall decrease in supplies, 3.24 million cattle were accepted for CAB – down 320,000 head from 2011, yet still the third-largest number to qualify in any year. CAB relayed that the key to sales records, despite lower cattle supplies, came from the increase in lbs. sold per carcass – and increase of 10 percent vs. 2011.
Last February, the opening of the Education & Culinary Center in Wooster, Ohio, was expected to advance further collaboration with partners and bridge the gap between ranchers and consumers through education, Stika said. Since opening, more than 40 groups have participated in programs, which included menu merchandising, discovering and using new cuts, and beef science, among other things.
Introduced at the middle of the fiscal year, the GeneMax DNA test for gain and grade potential received orders for more than 3,000 test kits from more than 70 Angus ranches by year’s end.
“As we and our partners enter fiscal year 2013, continued success depends on staying focused on listening and understanding consumer demand,” Stika said. “We must prepare for anything but stay intentional on providing a memorable dining experience that delivers time and time again.”